Finance for BTLs: Helping you become a landlord
Helping you share in the profits of professional Buy to Let
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Current Terms Available
- £50,000 – No Maximum
- Individual arrangements tailored to your circumstances
- Rates starting from 2% over base
- Non-status and full status
- Repayment and interest only available
- Adverse Credit – no problem
- Supporting your business plans
- Flexible requirements
- Multiple properties
- Up to 80% Loan to Value available
- Support building a property portfolio
- Commercial and Residential property
Buy to let has become a popular way to share in the growth of the property market.
Amateur and professional investors alike are investing in residential property, with the intention of letting it out. It can provide an alternative to a pension for some investors, while others use it as part of a business plan, and build up a large property portfolio.
Unlike many other types of investment, it can offer both income and capital growth. You could enjoy a regular income from a buy to let property in the form of rent, and steady capital growth if house prices continue their move upwards.
But all types of residential property are expensive, and relatively few people have sufficient cash to buy outright. By gearing, or borrowing to buy rentable property, you can secure the property you need, and hopefully use it to generate sufficient funds to pay off the loan, or to service the interest payments on it.
Buy to let mortgages are designed to provide the funds you need.
What is a buy to let mortgage?
If you buy a home with a conventional mortgage, the lender will almost certainly include clauses that will prevent you letting out the property. A buy to let mortgage contains no such restrictions and is specifically defined as a loan for buying or refinancing property which is let to tenants rather than lived in by the borrower.
They are similar in principle to a homebuyer's mortgage, but are classed as a business transaction and are not subject to the same regulations as residential mortgages. This means that they are more flexible, but rates and fees are typically higher than those you would find with a standard residential mortgage.
Buy to let mortgages are a lot like ordinary mortgages, but with some key differences:
- The fees tend to be much higher
- Interest rates are usually higher
- The minimum deposit for a buy-to-let mortgage is 25% of the property’s value
- Many buy to let mortgages are interest-only. This means you don’t pay anything each month, but at the end of the mortgage term you repay the capital in full
- Most buy to let mortgage lending is not regulated by the Financial Conduct Authority (FCA)
Eligibility for a buy to let mortgage
Unlike residential mortgages which are calculated on the basis of your salary, Buy to let mortgages are based on the revenue your property will generate. The mortgage lender will make a rent to interest (RTI) cover calculation. This means that you will need to show that you can obtain enough rental income from a tenant to cover the interest on the mortgage.
RTI cover calculations vary between lenders. The rental income usually has to be between 125% and 130% of the monthly mortgage repayment. Many lenders also require a minimum income of £25k per annum in addition to the income made from rent.
Most buy to let mortgage lenders impose a maximum age of 75 on maturity of the loan, however, there is a small number that extend this to 85.
Interest-only or repayment?
Buy to let mortgages can be interest only or repayment depending on your investment strategy. The repayment route is often suited to investors using property as an alternative pension plan or looking to build a small property portfolio. With monthly capital and interest repayments, the investor can be sure that at the end of the mortgage term the full loan is repaid.
The interest-only route is usually more popular with professional landlords and property investors
Buy to let mortgage fees
Set-up fees which include arrangement, booking and valuation for buy to let mortgages can be higher than for residential ones. In some cases, these initial fees can be as high as 3% of the value of your loan. It makes sense to pay these fees as cash - although it is possible to add them to the amount you borrow, it is a costly option. If you add the fees to the mortgage you'll pay interest on them over the life of the loan.
Remortgaging an existing property
It may be possible to arrange a buy to let mortgage on a property that you already own, and which is already tenanted. This will allow you to raise funds to use as you wish - and could be a simple way to raise the cash to buy an additional property.
REAL EXAMPLES OF WHAT WE CAN DO
Help arrange funding for a first-time landlord
Find the most competitive funding arrangement for student let
Find finance to allow a landlord to secure a house close to a London tube station
Source funding to allow a landlord to build his property portfolio
Arrange funding based around a remortgage of a landlord’s existing property to allow him to buy another
Buy to let solutions from Rangewell
The property market is highly competitive, and it is important to have expert help to get the kind of funding that will help you reduce your outgoings.
Many high street banks and building societies offer buy to let mortgages, and there are also many providers who are only available through intermediaries who can offer specialist advice.
At Rangewell, we have access to the full range of buy to let mortgage deals. It lets us use our property finance expertise to support your business – and ensure that you have the financial solutions you need. We can help you reduce the costs of the finance you need, helping you retain more of the revenue your property generates.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
What people say about Buy to Let...
Helping you build your profits
Improve your returnsExperienced investors use Buy to Let mortgages to allow them to purchase multiple properties, helping them to increase returns overall.
Funding based on existing propertyWe can help you remortgage a property you already own, potentially providing cash for buying additional property.
Interest-onlyBuy to Let mortgages can be provided on an interest only basis, helping you to minimise outgoings.
Multiple propertiesYou can take out multiple Buy to Let Mortgages, allowing you to buy a number of investment properties.
High loan to valueBuy to Let mortgages can provide up to 75% LTV, making it easier for you to buy the property you want.
Maximise your profitsWe can help you find the most competitive funding, ensuring that you can maximise your returns.
Download Rangewell’s free and detailed guide to Property Finance
What types of Property Finance are there - which is right for you?
Why not all providers are equal
How we can help you pay less
The downsides to Property Finance - and how to avoid them
How to arrange Property Finance - What paperwork do you need?
Key terms explained
You may need an investment fundIf you take out an interest only mortgage you may need to arrange an investment which will allow you to pay off the loan.
Costs could increaseInterest rates will fluctuate on a Buy to Let mortgage. You must ensure that your rental income would cover your interest if rates increased.
Professional advice is essentialThere are tax and regulatory issues which may affect any Buy to Let investment in the future. Professional advice is essential
Our service is...
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